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> People have weird ideas about how settlement works. Just to be clear... I too am not aware of any evidence that this was the case. HOWEVER, there is a clear
by mbesto 5y ago
> People have weird ideas about how settlement works.
Just to be clear... I too am not aware of any evidence that this was the case. HOWEVER, there is a clear link of stakeholders between Citadel and Melvin Capital. Citadel provides the settlement for RH and it's entirely plausible that Ken Griffin reminded Robinhood who's paying their bills. RH had the shroud of legitimate direct financial reasons to stall order flow - so it was a win-win at the loss of PR/customer service.
- tptacek 5y agoThere's a lot wrong with this argument, but one of the most obvious problems with it is that lots of brokerages imposed limits on GME trading, including Schwab.
- mbesto 5y agoI use Schwab. They only limited option trading, but I could freely buy and sell GME. This was true for many of the other major brokerages. By all accounts, RH was the most restrictive and had the highest number of users placing non-sell orders. Very different ball game. What else is wrong?
- gruez 5y ago>Just to be clear... I too am not aware of any evidence that this was the case. HOWEVER, there is a clear link of stakeholders between Citadel and Melvin Capital. Citadel provides the settlement for RH and it's entirely plausible that Ken Griffin reminded Robinhood who's paying their bills. In other words, "there's no evidence that they did it, but they stood to benefit so they probably did it"?
- kasey_junk 5y agoI’m not even convinced there is evidence Citadel stood to gain from Melvin doing well. The terms of their deal weren’t disclosed but a lot of the news stories suggested Citadel got a slice of Melvin for a line of credit. That’s a pretty good distressed asset price!
- mbesto 5y ago> Citadel stood to gain from Melvin doing well. Not sure, but Ken Griffin personally would.
- mbesto 5y ago> In other words, "there's no evidence that they did it, but they stood to benefit so they probably did it"? Right. Speculative, but plausible.
- tptacek 5y agoIt's not plausible! Among many other problems, it effectively asserts that Griffin somehow muscled Charles Schwab at the same time as Robinhood. Citadel is a big company, but it's not that big. It's just a silly claim. People know one thing about this whole situation --- that Robinhood uses Citadel for execution --- and incessantly try to derive every other thing from first principles based on it.
- oakwhiz 5y ago>Citadel is a big company, but it's not that big Nice try, but Citadel is the largest market maker and if it were an exchange (ostensibly, it might as well be one!) then it would be almost as large as the CBOE! Source: Image from Quartz: https://i.imgur.com/SBzQn5C.png https://i.imgur.com/SBzQn5C.png
- tptacek 5y agoYou can just look up the relative sizes of those firms, you know. It's funny that you came up with CBOE as your reference, because you can look up how big CBOE is, too.
- oakwhiz 5y agoI'm not sure what you are trying to say here, but consider it noted - I'll take a look at some more up to date statistics soon.
- kasey_junk 5y agoHe’s trying to say that cboe is a particularly funny reference as they process minuscule equity trades. Which makes sense given they are an options exchange…